How Brooklyn crushed Manhattan in battle for startups

Innovative tech companies are increasingly choosing the trendy Brooklyn over Manhattan. A recent report found employment in Brooklyn’s creative industries soared by 155% over the past decade—almost 10 times the growth in Manhattan.

This has led to Brooklyn gaining a reputation as a hip new paradise for the tech community. So how did Manhattan, the onetime pinnacle of American innovation, lose so much ground to the once quiet Brooklyn?

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Entrepreneurs need to live in affordable areas while they work for sweat equity. Rents are modest in the Yorkville section of the Upper East Side, for example, but it has only one coworking space, The Commons. Compare this to Brooklyn, which welcomes the startup culture by providing myriad coworking spaces for companies of various sizes.

Then there are the new taxes on luxury real estate. These drive away rich foreign investors from Manhattan to more fruitful pastures. While framed as a means for the rich to pay their dues, the only people that truly benefit from these taxes are politicians. These levies end up hurting the people they’re supposed to support: the middle class. Rich foreign investors back New York City entrepreneurs, who create startups, which create jobs.

Even modern fashion works against Manhattan. Simply put, the "sweatshirt aesthetic" of startups doesn’t fit with the fashion culture of Manhattan, where dressing to impress is essentially mandatory. Startup workers spend the majority of their time attempting to figure out error messages in a dark room. The last thing they want to worry about is what to wear. On the other hand, Brooklyn, with its long association with the working and middle class, welcomes this aesthetic.

Lastly, most tech companies in Manhattan serve niche industries such as finance, media and advertising, publishing, fashion and real estate. But startups today typically develop products in more modern tech industries, and thus turn to Brooklyn, where they are able to connect with similar companies.

To help Manhattan regain some ground, lawmakers should offer some sort of relief for investors who start businesses and employ people. Don't tax our wonderful angel investors. The message should be: "We're so glad you're here!"

Everyone knows about the notorious Manhattan rent, which now averages more than $2,900 per month for a one-bedroom apartment. To counter this, policymakers need to promote middle income housing—in Manhattan.

And employers in Manhattan, for their part, could rethink their dress codes, as many have on the West Coast in response to the tech sector's ascension there.

Manhattan has historically been a symbol of American innovation, but it has some room to adapt to the ascending tech culture that will shape American business for years to come.

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